Cross-Border Successions

The entry into force, on the 17th August 2015, of Regulation (EU) No. 650/2012 will affect the law governing the estate of any person having assets or any other connection with one of the 25 EU Member States which have adopted this Regulation.

The aim of the Regulation is to eliminate uncertainty in cross-border succession matters by establishing that the law governing the succession of a person is the law of the Member State in which he/she was habitually resident at the time of death. This rule bears one exception, the deceased is allowed to choose the law of his nationality to govern his/her succession if different to the law of his habitual residence.

By setting the law of the deceased’s habitual residence as the applicable law, the Regulation has eliminated the doubt as to the applicable law in the case of immovable property. In some systems, the lex situs was considered to govern all aspects of the succession to immovable property. Instead, it is now clear that the law of habitual residence of the deceased at the time of death (or the chosen law where applicable) will apply to the succession of the immovable property to the exclusion of the lex situs where different. Provided that, the lex situs will continue to apply with respect to the formal requirements relating to the succession of immovable property (registrations etc. ).

Although the aim was to eliminate uncertainty, it may be argued that the Regulation creates some uncertainty of its own. Thus for example it is not clear whether the UK, Ireland and Denmark are considered as ‘third states’, in which case renvoi would apply. Therefore, there are still some aspects of the Regulation that need to be clarified but they are not likely to be resolved soon and possibly if /when referred to the European Court of Justice for a ruling.

When planning the succession to their estate, clients are advised to consult with their legal practitioners in the country of their habitual residence so as to understand the implications of the said law and to be in a position to decide whether to choose the law of their nationality instead.

The Regulation applies and has direct effect in all EU Member states except, the UK, Ireland and Denmark.